Kraken’s New NFT Marketplace Will Issue Loans: Report

Kraken’s new NFT marketplace will start issuing loans as CEO Jesse Powell said the exchange will expand into a marketplace for NFTs at the start of 2022 as we are reading more today in our latest cryptocurrency news.

Kraken’s new NFT marketplace announced it will issue loans and Jesse Powell also announced it in an interview with Bloomberg. The new features will enable users to borrow funds against their NFTs. Powell explained that the company will enter the NFT space in 2022 and hopes to add another feature to determine the liquidation value of the NFT and whether it can be put up as collateral for the loan. Powell continued:

“If you deposit a CryptoPunk on Kraken, we want to be able to reflect the value of that in your account, and if you want to borrow funds against that.”

The value of NFTs is all over the spectrum and only a smaller percentage of the token owners hold a digital collectible that is valued similar to what CryptoPunk is and whose floor price is set at 66.96 ETH for $273,673 at the time of writing. According to Powell, the NFT utility will surge next year:

“Phase one was speculation, phase two is buying art and supporting artists, phase three is going to be functional uses of NFTs.”

Kraken even acquired Staked as an infrastructure platform that allows for non-custodial crypto staking while trying to attract new investors. The clients of the exchange will be able to earn crypto rewards and yield while retaining contrl over their assets. Kraken was founded in 2011 and became the biggest exchange in the world and ranked in the top in terms of average liquidity, volume, and digital asset reserves as per the data from CoinMarketCap. Kraken’s announcement shows how NFT-backed loans became increasingly common as more Defi platforms like Nexo and Arcade offer these types of loans. As per the reports, Arcade closed a $15 million funding in December as a part of the broader effort to grow the offerings and to attract more investors to the collateralized NFT platforms.

As recently reported, The CEO and founder of US exchange Kraken, Jesse Powell, explained that Kraken looks to join the NFT bandwagon by launching an NFT marketplace but said he will have new features like allowing customers to use their digital collection as collateral to borrow funds. Powell outlined the company’s plans in an interview with Bloomberg, saying that 2021 will go down in history as the year of NFTs. The craze for these collections exploded outside of the crypto industry with many artists, sportsmen, and politicians issuing some form of digital art.